Social Studies Unit: The Great Depression

1 Social Studies Unit: The Great Depression Name _____ Class _____ Name _____ Class _____ Date _____ The Great Depression Section 1 Original content Houghton Mifflin Harcourt Publishing Company. Additions and changes to the original content are the responsibility of the instructor. 271 Guided Reading Workbook Section Summary THE STOCK MARKET CRASHES During the 1920s, stock prices rose rapidly. Many people bought stocks by buying on margin, hoping to sell them later at a large profit. In 1929 stock prices began to drop. Frightened investors sold stocks to pay off their loans, but there were few buyers. On October 29, known as Black Tuesday, the stock market crashed.

2 Investors lost everything. THE ECONOMY COLLAPSES The stock crash caused a banking crisis as banks lost their investments. People tried to withdraw all of their deposits and many banks went out of business. This crisis contributed to losses by businesses, which then needed fewer workers. MAIN IDEAS 1. The stock market crashed in 1929. 2. The economy collapsed after the stock market crash. 3. Many Americans were dissatisfied with Hoover s reaction to economic conditions. 4. Roosevelt defeated Hoover in the election of 1932. Key Terms and People buying on margin purchasing stocks with borrowed money Black Tuesday Tuesday, October 29, 1929, the day of the stock market crash business cycle up-and-down pattern of business production and unemployment Great Depression severe, economic Depression that followed the stock crash of 1929 Bonus Army unemployed World War I veterans who camped in Washington to demand early payment of military bonuses Franklin D.

3 Roosevelt New York governor elected president in the 1932 election Academic Vocabulary implement put in place Why did many banks go out of business after the stock market crash? _____ _____ _____ Name _____ Class _____ Date _____ Section 1, continued Original content Houghton Mifflin Harcourt Publishing Company. Additions and changes to the original content are the responsibility of the instructor. 272 Guided Reading Workbook Normally when businesses produce more than they can sell, they have to cut back production. As people are laid off, the demand for goods drops. This can cause a severe recession called a Depression . When the economy bounces back, more people are hired, and demand increases.

4 This pattern of ups and downs in the economy is called a business cycle. The economy was slow to recover after the crash in 1929. This period, the Great Depression , had several causes. One was overproduction of goods as the market was shrinking. Other factors were the uneven division of wealth and limited world trade. HOOVER S REACTION President Hoover knew that people needed help. He did not believe, however, that it was the role of the federal government to provide direct relief. He did implement some new programs to help banks and other institutions recover. In 1932 the Bonus Army camped in Washington, These veterans wanted early payment of military bonuses. Hoover sent troops to evict them.

5 When several people were killed, the public was outraged. ELECTION OF 1932 The Republican Party nominated Herbert Hoover again in 1932. However, much of the public had lost confidence in him. The Democratic nominee was Franklin D. Roosevelt. As governor, he had worked to provide aid to citizens of New York. In particular, he had provided aid to farmers . Roosevelt promised a new deal for the american people. He won the election in a landslide. CHALLENGE ACTIVITY Critical Thinking: Making Judgments Do you think the american people were justified in blaming Herbert Hoover for the Great Depression ? Write a paragraph to explain your position. What normally happens in the business cycle after a recession?

6 _____ _____ _____ Why did people believe Roosevelt would keep his promise to provide aid? _____ _____ _____ Underline the sentence that explains why President Hoover did not implement relief programs to help people who were struggling. Name _____ Class _____ Date _____ Section 1, continued Original content Houghton Mifflin Harcourt Publishing Company. Additions and changes to the original content are the responsibility of the instructor. 273 Guided Reading Workbook DIRECTIONS On the line provided before each statement, write T if a statement is true and F if a statement is false. If the statement is false, write the correct term on the line after each sentence that makes the sentence a true statement.

7 _____ 1. The up-and-down pattern of the economy is known as the Great Depression . _____ _____ 2. When an investor bought stocks with borrowed money, that person was buying on margin. _____ _____ 3. In contrast to Herbert Hoover, the Bonus Army provided aid to Americans who were suffering from the Great Depression . _____ _____ 4. The stock market crash on October 29, 1929, became known as the business cycle. _____ _____ 5. The economic downturn following the stock market crash in 1929 was called the Great Depression because of its severity and length. _____ _____ 6. The Bonus Army lived in a Hooverville in Washington, _____ buying on margin business cycle Bonus Army Black Tuesday Great Depression Franklin D.

8 Roosevelt Name _____ Class _____ Date _____ The Great Depression Section 2 Original content Houghton Mifflin Harcourt Publishing Company. Additions and changes to the original content are the responsibility of the instructor. 274 Guided Reading Workbook Section Summary THE HUNDRED DAYS Roosevelt told Americans that economic recovery was possible. He called Congress into a special session, known as the Hundred Days. They created the New Deal to aid economic recovery. One program was the Emergency Banking Relief Act. It was passed to restore confidence in banks. The president talked about it in his first fireside chat. Other programs put people to work on public projects, such as roads, airports, and parks.

9 The MAIN IDEAS 1. Congress approved many new programs during the Hundred Days. 2. Critics expressed concerns about the New Deal. 3. New Deal programs continued through Roosevelt s first term in what became known as the Second New Deal. 4. Roosevelt clashed with the Supreme Court over the New Deal. Key Terms and People New Deal programs developed by Roosevelt to aid economic recovery fireside chats radio addresses in which Roosevelt spoke directly to the public Tennessee Valley Authority New Deal program to build dams to provide electricity in the Tennessee River valley Frances Perkins Roosevelt s Secretary of Labor, the first female cabinet member Eleanor Roosevelt First Lady in Roosevelt administration who supported New Deal Social Security Act federal law that started programs to ensure economic well-being of citizens who could not provide for themselves Congress of Industrial Organizations new union that organized workers based on industry.

10 Not skill level sit-down strike strategy in which striking workers remained inside the workplace Academic Vocabulary authority power, right to rule Why was the Emergency Banking Relief Act passed? _____ _____Name _____ Class _____ Date _____ Section 2, continued Original content Houghton Mifflin Harcourt Publishing Company. Additions and changes to the original content are the responsibility of the instructor. 275 Guided Reading Workbook Tennessee Valley Authority (TVA) hired people to build dams that provided electricity to poor communities. Frances Perkins helped pass the National Industry Recovery Act to help businesses. NEW DEAL CRITICS Critics of the New Deal felt it went too far or not far enough.